Abstract
Recent applications of game theory models to economic systems have increasingly emphasized the role played by information in microeconomic models of imperfectly competitive markets. This required a more precise description of the demand and supply functions in the market and how signals or messages are processed and conveyed. In contrast to the deterministic models which emphasize a single unchanging price in a static framework, the recent models of markets with imperfect information (Rothschild 1971, Case 1973) have clarified the economic basis of uncertainty which complicates the formulation of the market models and their stability characteristics, e.g., firms have to decide upon the type of information to select, on the frequency of search and on the relative profitability and risk.
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Sengupta, J.K. (1985). Game theory models applied to economic systems: their information structure and stability. In: Information and Efficiency in Economic Decision. Advanced Studies in Theoretical and Applied Econometrics, vol 4. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-5053-5_11
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DOI: https://doi.org/10.1007/978-94-009-5053-5_11
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